Karnataka Power Muddle


Thursday, March 20, 2008


The World Customers' Day was observed by BESCOM in its usual ritualistic style on Saturday, the 15th March by holding a workshop on 'Customer Care', in association with Public Affairs Centre (PAC), Swabhimana, Consumer Advocacy, and Karnataka Electricity Regulatory Commission (KERC). Of the audience of a 100 odd people, only some 30 were members of Civil Society groups (RWA's, etc), the rest comprising mostly of BESCOM officials. Seeing this, the chief guest, Dr Samuel Paul, Chairman, PAC, remarked that the poor turn out was perhaps an indication of the high level of satisfaction with BESCOM services.

I wish to submit here that such statements by people of the stature of Dr Paul tend to convey a totally wrong picture compared to the actual position obtaining on the ground. Granted that the services may have improved compared to what it was a few years ago. But, Bangalore today produces goods and provides services of the highest quality to its clientele right across the globe. For such a city, the interruption-ridden service of BESCOM is nowhere near good enough. And, it is not as if better level of service is not possible in the Indian context, or anything like that. Cities such as Mumbai, Ahmedabad, Surat, Kolkata, Greater Noida, enjoy far better quality of power supply. This is evidenced by the fact that, while Bangalore is currently a Rs 1500 cr market for gensets, inverters, converters, batteries, emergency lamps, candles, match-sticks, and what have you, these products have a marginal presence, if at all, in the cities listed. And, now, New Delhi is all set to join them. The reason for the same is also not too far to seek - while Bangalore is served by the government-owned BESCOM, all the other cities are served by companies in the private sector. Need one elaborate further?

The apologists would immediately go on to talk about BESCOM's social responsibility of having to cater to the needs of the rural sector. But, then is it doing any better than its counterparts in the other states in this aspect? The records do not show anything like that, either. In effect, whereas in Karnataka, the people in both the cities as well as in the rural areas have to suffer the incapacity of the government agency, people in cities like Mumbai get the benefit of quality power supplied by private sector companies even as their rural brethren may not be in such a privileged position. Perhaps that is the idea of social justice of Karnataka politicos! But, in today's competitive world, can a city afford this?

Ironically, however, in Karnataka itself, there has existed from long an excellent model for sustainable rural power distribution in the form of the Hukeri Co-op Society in Belgaum district. The Society buys power in bulk at high voltage from the Karnataka Power Transmission Corporation (KPTCL), arranges its distribution, collects money, and remits it to KPTCL on time, thus ensuring quality power supply from them, and, in the process, keeping everyone including the many farmer members totally happy. Where this model may not be feasible, particularly in geographically isolated communities, stand alone solar systems are a far more sensible option, than running kilometers of transmission lines. Very clearly, therefore, the rural sector load has been pooled in by BESCOM only to provide a convenient scapegoat to mask its poor planning and management.

Coming back to the workshop - now, if people do not turn up in sufficient numbers at such meetings, it is not because they are satisfied with the services, it is plainly because of the futility of complaining to a government agency. Those who can afford have made alternate arrangements, and those that can't are any way voiceless. One would have thought organizations like PAC, Swabhimana, Consumer Advocacy, and even the KERC would bother to speak up for the voiceless.

Muralidhar Rao

Thursday, March 13, 2008

Gone with the wind - Tamilnadu scene

Only myopia can obfuscate the writing on the wall. A power crisis should not be stalking Tamil Nadu (TN), not with over 50 per cent of the nation’s total wind-power generation capacity, at 3,684 MW, installed in the state. But though TN has the required infrastructure, there aren’t enough lines to carry the wind energy harnessed thus. For more, read:

Wait until dark - Tamilnadu scene

It is true that power crises are common in most Indian states but Tamilnadu's legendary power-surplus status was the reason why high profile companies such as Nokia, Dell and Samsung invested here. But, the situation has changed considerably. For more read:


Tuesday, September 11, 2007

the power circus

text of the letter sent to the Times of India:

I refer to the news item captioned 'KPTCL starts new power company' - Power Company of Karnataka Ltd (PCKL), if you please - reported in your columns on the 8th Sept.

It is supposedly being promoted by KPTCL to set up three new 1000 MW mega power plants in the state. Now, when there already exists the fairly competent KPCL in the state for precisely the same purpose, one wonders what exactly the KPTCL and the government are upto.

Even stranger is the suggestion supposedly made to the ESCOMS to invest Rs 1 crore each in the new company to help it establish itself, even as they are collectively due from the government subsidy arrears of the order of Rs 2,400 crores.

All in all, the government, along with its agencies, has converted the power sector in the state into some kind of a circus. And, all that the KERC is interested in is playing the role of a consumer forum.

Thursday, August 30, 2007

management wizardry

text of the letter sent to the New Indian Express:

I refer to the report in you columns today (August 28th,’07) under the caption 'pending subsidy release in phases', alluding to a statement made by the CM that pending subsidy amounts of the orders of Rs 2400 crores will be released to the ESCOMS ‘without affecting their working’.

Now, Rs 2400 crores is a lot of money. In quite a few cases, the respective allocations are higher than even the annual revenue earnings of some of the ESCOMS. If their release has to await the benevolence of the CM, then it will require far greater expertise than available at even our IIM’s to manage them ‘without affecting their working’. Besides, this whole arrangement cannot be defined as a business any longer. So, why the pretense of running them as businesses when, by classifying as ‘social services’, the government can earn the goodwill of the ‘aam aadmi’, as also become eligible for exemption from the various central levies?

And, as for industry, business, trade and the upper classes, anyway they are hardly dependent on the ESCOMS for their needs.

an exchange with Dr S

Dr S: Your suggestion of privatization of distribution is a sound one provided it is done in the right spirit and to the honest and competent company. There are any number of companies which would be happy to take over. They will strip all the assets and bankrupt the company and walk a way. That is a worst case scenario. Unfortunately we just do not have many good companies. Still I am all for privatization.

MR: I am surprised at your observations, Sir! Tata’s certainly cannot be termed as fly-by-night operators. They have been in the field from long and doing a good job, particularly in Mumbai, and lately in Delhi. So, have the RPG group in Kolkata and Greater Noida, and Reliance in Mumbai, and now in Delhi. Then you have the Ahmedabad Electricity Supply Co Ltd (possibly belonging to the Torrent group), Surat Electricity Supply Co Ltd, etc, etc, all of whom have been doing a far better job than the Electricity Boards, or their new incarnations - the ESCOMS.

Dr S: But you did not suggest an alternative to nimby excepting to produce power at the mines. Is this a good strategy to have all your eggs in one basket? Should not we have power in different places.

MR: Even London depends on a nuclear power plant across the channel in Graveline in France for a large share of its power requirements. So, what are we talking about? Besides, the chance of disruption of power supply across the grid is far lower than disruption of coal supplies across oceans or across the entire stretch of the sub-continent (all the way from the coal belts in Orissa, Jharkhand, etc). Ideally, the entire Karnataka base load could be on the imported NTPC/ PGCIL power, as well as on locally generated (Raichur & Bellary) thermal power, and the peaking load can be on the local hydel (Sharavati & Kali) power. We have enough capacity for that. All future requirements can be met through imports from NTPC/ PGCIL. Alternatively, KPCL can set up generation capacity in Orissa/ Jharkhand on a power sharing arrangement, and transmit the state’s share through PGCIL’s lines.

Dr S: I have not taken a stand against Chamalapur for that reason. I am against coal. But I am for gas. Gas will not have most of the problems of coal. We are importing coal and we might as well import gas. Of course gas costs far more than coal. But we pay more for externalities in the case of coal. This is some thing we as a society should decide. Do we want "cheap" power over environment or are we prepared to pay for environmental protection.

MR: You have raised valid questions, as also answered a few of them yourselves. I have focused largely on the merits of generating power at pit-head stations and transmitting it to user points, even if far flung, as compared to transporting coal there and burning it. Coal, whether burnt in Talcher or in Chamalapura, will contribute equally to global warming. And, if it has not gone through the benefication process, which invariably is the case in India, half the quantity you are transporting is anyway just muck. In Talcher, you atleast have the possibility of pumping the fly-ash into the used pits and attempting re-afforestation on the surface, neutralizing the harmful effects, even if partially. As compared to that, in Chamalapura, you will land up dispersing the fly-ash over the local land-scape, in the process degrading the air and soil quality considerably, for miles on end.

Even with all the attempts at conservation, when the economy is growing at close to10%, we still need sizable fresh generation capacity addition. Given the overall scenario, India doesn’t appear to have too many options other than exploiting its enormous coal reserves, at least in the immediate future. Yes, it will mean adding to global warming, and gas is perhaps a better option from that perception. But, its prohibitive costs have led to the Bidadi and Dhabol projects, which were supposedly based on it, not even taking off.

There are no easy answers. But there are definitely simpler answers compared to what the government is considering.

Tuesday, August 28, 2007

an exchange with Mr R

Lack of political will to enforce the law, Sir! When Anil Ambani's Reliance Power raises a bill, even Dawwod Ibrahim's henchman in Dharawi (Mumbai) pays up on time, fearing disconnection in case of delays. As compared to that, all it requires here is for a call from the local Corporator's PA to carry on merrily without a sanction or a bill. In fact, a KERC member admitted recently in an open public forum that the non-payers in Karnataka form a far more powerful lobby than the payers. And, quite the height of it all was when a Delhi state cabinet minister was running a full-scale battery charging unit on an unauthorised connection for years together under the erstwhile DESU regime. Of course, things have now changed in Delhi after the take-over by Tata's and Reliance.

Muralidhar Rao

On 8/28/07, Mr R wrote:

Can we not have the law applied to collect monies due. We are seeing it applied to the rich and famous!


Monday, August 27, 2007

no thermal plant in my backyard, please!

text of the letter sent to the press:

From Nandikur to Tadadi to Chamalapur, nobody wants a thermal power plant in his backyard, particularly when a major part of the power generated is going to be feeding consumers not in the immediate neighborhood, but in distant Bangalore.

Now, there doesn't appear to be much of an appreciation, amongst the powers that be, that in order to meet the state's demand for power, it doesn't require coal to be transported from afar and burnt here. There is a far more efficient and cost-effective option as has already been amply demonstrated by the NTPC (National Thermal Power Corporation Ltd) - PGCIL (Power Grid Corporation of India Ltd) - KPTCL (Karnataka Power Transmission Corporation Ltd) arrangement, whereby Karnataka is able to tap at Whitefield (in Bangalore) 750MW of power generated at Talcher in Orissa. And, NTPC/ PGCIL will be happy to augment that capacity and supply as much power as is needed by Karnataka, provided KPTCL gets itself into a position to pay for the power on time. To know where that situation stands as of now, all you need to do is to visit the KERC (Karnataka Energy Regulatory Commission) site which will tell you that for purchases of the order of Rs 24,830 million, KPTCL owes KPCL (Karnataka Power Corporation Ltd) Rs 21,046 million any given day, ie a debtors-days figure of an incredulous 309. If I understand the Company Law guidelines correctly, this entire amount will have to be shown under 'doubtful debtors' in the KPCL balance sheet. Given such a scenario, it is surprising that NTPC/ PGCIL even maintains a relationship with KPTCL, fearing as it should be of similar treatment should a maverick politician came on to the scene and issued orders that way.

And, that exactly is the problem. With the interference in the running of the ESCOMS by the politicians, they are not able to collect their monies on time to pay up KPTCL, which in turn is not able to pay KPCL on time, and the vicious cycle perpetuates.

And, the truth of the matter is that this problem can be solved only through privatization of distribution, perhaps on the lines of the model adopted by New Delhi, in the cities. And, as for the rural areas, there is the excellent Hukeri Co-op Society model, which at worst may require a bit of tweaking.

Thursday, June 28, 2007

R has a different view point

Mr Rao,

In the spirit of contesting everything which is not right, I would like to state that this year the entire state of Maharashtra is reeling under sever power shortage, and Mumbai, the seat of state govt, is also severely impacted. Gone are those days when Mumbai used to receive uninterrupted power supply.

It is easy for all of us to crib about a situation whereby 80% of the time we receive good power supply in Bangalore, w/o realizing that rest of the state is in much worse condition, simply because Bangalore happens to be the seat of state govt.

IMHO, it is not the question of BESCOM or private players (Delhi is a good case in point), rather it is the patronizing attitude of us or our elected representatives which is at fault. And, that's what we need to fix.

Thanks, R

My response

Dear R

The current problem in Mumbai is on account of interference by politicians, who are forcing Reliance and Tata's to pump part of their generation into the MSEB grid to supply neighbouring districts (not under the supply jurisdiction of Reliance or Tata's), lest they get beaten up by the people there who are envious of the much better quality of power that their neighbours in Mumbai enjoy.

The irony, on top of it all, is that the MSEB pays for it in its own sweet time, if at all.

Left to them, Reliance, TATA's, and the like will solve not only Mumbai's problem, but even those of the outlying districts. The business plans will be different, that's all. But, businees, it has to be! Not, plunder by a privileged few in the name of Socialism.

Besides, there already exist excellent models for sustainable rural power distribution in our own Karnataka itself, one of them being The Hukeri Co-op Society. They run it business-like, unlike the government agencies, and everyone including the many farmer members are better off for it all. Essentially, goverments have to get out of running businesses, and leave them to businessmen. And, businessmen have evolved, and today are far more sensitive to the various issues involved than you can ever hope the government Babu to be.

If Delhi had continued with DESU, the city would have been dead by now. In the face of all the sabotage activities by the unionists, Reliance and Tata's are steadily coming to grips with the situation, and in another few years' time, the city will enjoy far better quality power, on par with the others where the private suppliers have been in business from long.

For more, read http://karnataka-power-muddle.blogspot.com/